Amazon's New Product Bundling Policy: What It Means for Sellers

Amazon's recent update to its bundling policy for consumable goods has sparked sellers’ attention. The change, which took effect on October 14, 2024, impacts categories like grocery, pet products, baby items, health, and beauty, and aims to provide customers with higher-quality bundles. But what does this mean for Amazon sellers, and how can they adapt to the new rules?

In this article, we'll break down Amazon’s official announcement, provide expert insights on how it will affect sellers, and discuss the broader reaction from the Amazon seller community. If you're selling in these categories, this update is critical to understand.

What is Amazon's New Bundling Policy?

As of October 14, 2024, Amazon has updated its bundling policy for consumables. Sellers can now only list bundles that are created and offered by the original manufacturer. This means:

• No more mixing brands: You can’t create bundles that mix products from different manufacturers. For example, a bundle containing a Frito-Lay Mixed Chips Pack and a non-Frito-Lay item like a drink or napkins is no longer allowed.
• Brand ownership is key: Bundles must be sold by the manufacturer that owns the brands of all the items in the bundle.
• No generic bundles: Sellers can no longer create generic or unbranded bundles under their own brand. Everything needs to be under the manufacturer’s original brand.

The policy is designed to ensure that only high-quality, brand-owned bundles are sold on Amazon. Sellers who violate these rules may face listing suppression, and Amazon plans to begin enforcement by late Q4 2024, giving sellers a 30-day notice before taking action on non-compliant listings.

How This Impacts Amazon Sellers

This policy change primarily affects resellers who were bundling items from multiple brands or creating custom bundles under their own private labels. Here are the key areas impacted:

1. Reduced Flexibility in Bundling

Sellers previously had the freedom to create bundles mixing products across brands or even list products under a "generic" brand to target specific niches. This practice will no longer be viable, significantly limiting creative bundling opportunities.

2. Increased Inventory Challenges

Sellers who have been stocking up on multi-brand bundles may now face inventory liquidation challenges. With Amazon's enforcement of this policy set to start by the end of Q4, sellers must begin liquidating affected products to avoid being stuck with unsellable inventory. Offering discounts and creating special promotions might be necessary to clear these stocks before enforcement kicks in.

3. Enforcement Uncertainty

While Amazon has promised a 30-day warning before suppressing non-compliant listings, there's still uncertainty about the exact timeline. Sellers have reported receiving inconsistent notices regarding policy violations in the past, which raises concerns about how smoothly the enforcement process will go.

Seller Sentiment on the Policy Change

The reaction from the seller community has been strong, with many sellers expressing frustration over the new restrictions and how they will affect their businesses.

For instance, one seller pointed out how this update will impact more than half of the grocery and health & beauty categories, where multi-brand bundles have been common​. Another seller raised concerns over the enforcement of bundles like snack boxes, which rely on a variety of items from different manufacturers​.

Several sellers also reported that their accounts had been suspended for similar violations months before this official update, and they feel Amazon's rollout of the policy lacked consistency​. The seller community is questioning the fairness of these sudden changes, as some sellers were penalized without warning, while others are being given a 30-day grace period.

How This Policy Benefits CPG Brands

This policy change presents a significant advantage for CPG (Consumer Packaged Goods) brands, as it enables them to reclaim control over their brand representation and pricing strategies. By eliminating unauthorized bundles from resellers, brands can ensure that only manufacturer-approved products are sold in combination, reducing the risk of poor customer experiences due to mismatched or incompatible products. This level of control helps maintain consistent quality, brand integrity, and customer trust, ultimately benefiting both the brand and the consumer.

CPG brands will also enjoy healthier margins, as the removal of unauthorized resellers means there will be less pressure to compete with artificially low prices set by unauthorized sellers trying to move multi-brand bundles. Without these competing bundles, brands can better protect their price points, enforce MAP (Minimum Advertised Price) policies, and create more compelling value propositions directly aligned with their business goals. This opens the door for better profitability and an improved relationship with Amazon’s ecosystem, where brands can focus on curated, high-quality bundles that are representative of their vision.

Our Take on the Policy Update

In our video breakdown of the bundling policy update, SellerAssist by Carbon6 Co-Founder and Amazon expert Vanessa Hung discusses the significant impact this change will have on resellers. This policy is particularly concerning for those who rely on bundling to differentiate themselves on Amazon.

Key Takeaways from the Video:

• Impact on Private Label: Sellers who were previously using brand registry to access features like A+ content will no longer have this option if they can't bundle products from different manufacturers.
• Enforcement Timeline: Enforcement could start anytime between late Q4 2024 and early next year, though Amazon has not provided an exact date. Sellers should take this time to liquidate non-compliant bundles as soon as possible to avoid losses.
• Legal Concerns: This policy might have been triggered by lawsuits from brands upset about unauthorized reselling practices. For example, a brand like Skittles might not want its products bundled with items from other manufacturers, leading to this stricter enforcement​.

Actionable Steps for Sellers

If you’re an Amazon seller in the affected categories, here are some actionable steps you can take to stay compliant with the new bundling policy:

1. Audit Your Current Listings:

Identify any bundles that include items from multiple manufacturers or unbranded products. Start preparing to liquidate these products by running special promotions or discounts.

2. Create New Compliant Bundles:

Shift your focus to creating bundles that include products from the same manufacturer. For example, if you sell Frito-Lay products, make sure your bundles consist only of Frito-Lay items.

3. Communicate with Your Clients:

If you're an agency working with clients, inform them of the policy changes and help them adjust their bundling strategies. Offer guidance on how to stay compliant and avoid penalties.

4. Monitor Account Health:

Pay close attention to your account health dashboard for any notices regarding non-compliant listings. Amazon has promised a 30-day grace period before enforcement, so stay vigilant to avoid sudden listing suppression.